To survive negative interest rates, Alecta and other funds have been turning to riskier, less liquid assets. Persson says his fund has ditched many of the most expensive government bonds. Instead, he’s bought government-guaranteed credits and stepped up lending to regions and municipalities.

One strategy that really paid off was buying up bonds issued by countries that needed bailouts during Europe’s debt crisis, Persson said.

Given the ECB’s 2012 pledge to do whatever it takes to save the euro, it was clear that Spanish and Irish bonds were “obviously going to be a great investment,” he said. “We were one of the largest investors during that period, and that was a very successful strategy.”

This article was provided by Bloomberg News.

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